It's shaping up to be a tough period for Winning Health Technology Group Co., Ltd. (SZSE:300253), which a week ago released some disappointing full-year results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 5.6% short of analyst estimates at CN¥3.2b, and statutory earnings of CN¥0.16 per share missed forecasts by 2.9%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Winning Health Technology Group's six analysts is for revenues of CN¥4.08b in 2024. This reflects a sizeable 29% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 56% to CN¥0.26. Before this earnings report, the analysts had been forecasting revenues of CN¥4.17b and earnings per share (EPS) of CN¥0.25 in 2024. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.
The consensus has made no major changes to the price target of CN¥8.99, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Winning Health Technology Group, with the most bullish analyst valuing it at CN¥11.60 and the most bearish at CN¥5.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Winning Health Technology Group's rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 16% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Winning Health Technology Group is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Winning Health Technology Group following these results. They also downgraded Winning Health Technology Group's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Winning Health Technology Group going out to 2026, and you can see them free on our platform here..
Even so, be aware that Winning Health Technology Group is showing 1 warning sign in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.